Section 10.9 Exclusion b—Contractual Liability Exclusion

LibraryInsurance Practice 2015

The contractual liability exclusion excludes liability assumed by an insured in a contract or agreement. There are two exceptions: liability assumed in an “insured contract” as defined in the policy and where the insured would be liable in the absence of a contract, i.e., where the insured owes indemnity as a matter of law. The liability assumed by the insured is not liability arising out of the insured’s own breach of contract but, rather, refers to an agreement by the insured to indemnify or hold harmless a third party. Great Am. Ins. Co. v. Pearl Paint Co., 703 S.W.2d 601 (Mo. App. E.D. 1986); West v. Jacobs, 790 S.W.2d 475 (Mo. App. W.D. 1990).

Liability assumed under an “insured contract” (formerly an “incidental contract”) is covered. Included in the definition of “insured contract” is that...

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